Direct produce sales best

There may be a better alternative market for produce that is of good quality, but doesn't quite meet the visual standards of the fresh market. Southeastern vegetable producers should consider forming alliances with processors in the region to capitalize on the booming fresh-cut market, says the president of the International Fresh-Cut Produce Association.

The fresh-cut category has grown over the past 13 years from zero to capture 10 percent of the retail sales in the United States. Health conscious consumers have fueled the growth, and by and large, distributors in urban areas have filled the demand. But small, as well as large, vegetable producers can also take advantage of this continuing trend.

“One of the first things farmers can do is meet with a processor and find out what their raw material needs are,” says Edith Garrett, president of the IFCPA. She was the keynote speaker at the 16th Annual Southeast Vegetable and Fruit Expo in Greensboro, N.C.

“Find out what the processor is using and try to form an alliance to be a supplier,” Garrett says. “In other words, plan to sell 30, 40 or 50 percent of your crop to the processor and sell the remainder on the fresh market.”

The farmer's part in this equation may be to look at what he's throwing away or plowing under — varieties that yield well, but for different reasons are not good for the fresh market.

“The processor is looking to increase his yield,” Garrett explains. “If you bring in a five pound watermelon, he wants to get as much out of that watermelon he can. You could grow thin-rind watermelons and meet the need. For peppers, the processor would want to grow varieties with thick walls.”

For processor use, think about varieties that do well for you in your area — varieties with good yields and low production costs that didn't meet the needs of the fresh market, Garrett says.

“Maybe you're never going to be a processor, but you can try to partner with the processor who's looking for produce,” she says.

Becoming a supplier for a regional processor is definitely a route for farmers to pursue, Garrett said in an interview. Continued demand is making grocery stores and the food service industry a veritable Garden of Eden filled with new varieties that are adding green to the bottom line.

Demand in supermarkets for fresh-cut produce has skyrocket. In 1987, there were 173 varieties in the produce section; today, there are more than 335 varieties available, Garrett says. Lettuce, baby carrots, broccoli, peppers are just a few of the crops that have made the fresh-cut produce industry the fastest growing category. In 2000, for example, retail salad sales reached $1.7 billion.

The largest growth for the fresh-cut produce industry, however, is coming from the foodservice industry, Garrett says. “This is changing the face of the produce industry. This is really where all the action is and will be for the next five to 10 years.” The food service industry is growing faster than grocery stores.

Sales to the food service industry rose 130 percent and are now at $275 billion. “Think of how you can apply your produce to the food service industry,” Garrett says.

Market pressure, consolidation, imports, food safety and security and consumer lifestyles are also driving the increase in the fresh-cut industry.

Consolidations and partnerships within the industry have been made to meet the needs of larger buyers, Garrett says. For example, this summer Kroger announced it would buy all of the sweet corn production of one variety in the United States.

An increase in imports has become necessary to meet the year-round demands of the consumer. The value of imported produce grew from $2 billion in 1987 to $4 billion in 1997.

The increase in value-added products is in answer to the demand for more convenience and variety to fit consumer lifestyles, Garrett says.